CHAPTER 1. GENERAL PROVISIONS
BUSINESS AND COMMERCE CODE
TITLE 1. UNIFORM COMMERCIAL CODE
CHAPTER 1. GENERAL PROVISIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1.101. SHORT TITLES. (a) This title may be cited as the
Uniform Commercial Code.
(b) This chapter may be cited as Uniform Commercial
Code--General Provisions.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.102. SCOPE OF CHAPTER. This chapter applies to a
transaction to the extent that it is governed by another chapter
of this title.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.103. CONSTRUCTION OF TITLE TO PROMOTE ITS PURPOSES AND
POLICIES; APPLICABILITY OF SUPPLEMENTAL PRINCIPLES OF LAW. (a)
This title must be liberally construed and applied to promote its
underlying purposes and policies, which are:
(1) to simplify, clarify and modernize the law governing
commercial transactions;
(2) to permit the continued expansion of commercial practices
through custom, usage and agreement of the parties; and
(3) to make uniform the law among the various jurisdictions.
(b) Unless displaced by the particular provisions of this title,
the principles of law and equity, including the law merchant and
the law relative to capacity to contract, principal and agent,
estoppel, fraud, misrepresentation, duress, coercion, mistake,
bankruptcy, or other validating or invalidating cause shall
supplement its provisions.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.104. CONSTRUCTION AGAINST IMPLIED REPEAL. This title
being a general act intended as a unified coverage of its subject
matter, no part of it shall be deemed to be impliedly repealed by
subsequent legislation if such construction can reasonably be
avoided.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.105. SEVERABILITY. If any provision or clause of this
title or its application to any person or circumstance is held
invalid, the invalidity does not affect other provisions or
applications of this title which can be given effect without the
invalid provision or application, and to this end the provisions
of this title are severable.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.106. USE OF SINGULAR AND PLURAL; GENDER. In this title,
unless the statutory context otherwise requires:
(1) words in the singular number include the plural, and those
in the plural include the singular; and
(2) words of any gender also refer to any other gender.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.107. SECTION CAPTIONS. Section captions are parts of
this title.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.108. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND
NATIONAL COMMERCE ACT. This title modifies, limits, and
supersedes the federal Electronic Signatures in Global and
National Commerce Act (15 U.S.C. Section 7001 et seq.) but does
not modify, limit, or supersede Section 101(c) of that Act (15
U.S.C. Section 7001(c)) or authorize electronic delivery of any
of the notices described in Section 103(b) of that Act (15 U.S.C.
Section 7003(b)).
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
SUBCHAPTER B. GENERAL DEFINITIONS AND PRINCIPLES OF
INTERPRETATION
Sec. 1.201. GENERAL DEFINITIONS. (a) Unless the context
otherwise requires, words or phrases defined in this section, or
in the additional definitions contained in other chapters of this
title that apply to particular chapters or parts thereof, have
the meanings stated.
(b) Subject to definitions contained in other chapters of this
title that apply to particular chapters or parts thereof:
(1) "Action," in the sense of a judicial proceeding, includes
recoupment, counterclaim, set-off, suit in equity, and any other
proceeding in which rights are determined.
(2) "Aggrieved party" means a party entitled to pursue a remedy.
(3) "Agreement," as distinguished from "contract," means the
bargain of the parties in fact, as found in their language or
inferred from other circumstances, including course of
performance, course of dealing, or usage of trade as provided in
Section 1.303.
(4) "Bank" means a person engaged in the business of banking and
includes a savings bank, savings and loan association, credit
union, and trust company.
(5) "Bearer" means a person in control of a negotiable
electronic document of title or a person in possession of a
negotiable instrument, a negotiable tangible document of title,
or a certificated security that is payable to bearer or indorsed
in blank.
(6) "Bill of lading" means a document of title evidencing the
receipt of goods for shipment issued by a person engaged in the
business of directly or indirectly transporting or forwarding
goods. The term does not include a warehouse receipt.
(7) "Branch" includes a separately incorporated foreign branch
of a bank.
(8) "Burden of establishing" a fact means the burden of
persuading the trier of fact that the existence of the fact is
more probable than its nonexistence.
(9) "Buyer in ordinary course of business" means a person that
buys goods in good faith, without knowledge that the sale
violates the rights of another person in the goods, and in the
ordinary course from a person, other than a pawnbroker, in the
business of selling goods of that kind. A person buys goods in
the ordinary course if the sale to the person comports with the
usual or customary practices in the kind of business in which the
seller is engaged or with the seller's own usual or customary
practices. A person that sells oil, gas, or other minerals at the
wellhead or minehead is a person in the business of selling goods
of that kind. A buyer in ordinary course of business may buy for
cash, by exchange of other property, or on secured or unsecured
credit, and may acquire goods or documents of title under a
preexisting contract for sale. Only a buyer that takes possession
of the goods or has a right to recover the goods from the seller
under Chapter 2 may be a buyer in ordinary course of business.
"Buyer in ordinary course of business" does not include a person
that acquires goods in a transfer in bulk or as security for or
in total or partial satisfaction of a money debt.
(10) "Conspicuous," with reference to a term, means so written,
displayed, or presented that a reasonable person against which it
is to operate ought to have noticed it. Whether a term is
"conspicuous" or not is a decision for the court. Conspicuous
terms include the following:
(A) a heading in capitals equal to or greater in size than the
surrounding text, or in contrasting type, font, or color to the
surrounding text of the same or lesser size; and
(B) language in the body of a record or display in larger type
than the surrounding text, or in contrasting type, font, or color
to the surrounding text of the same size, or set off from
surrounding text of the same size by symbols or other marks that
call attention to the language.
(11) "Consumer" means an individual who enters into a
transaction primarily for personal, family, or household
purposes.
(12) "Contract," as distinguished from "agreement," means the
total legal obligation that results from the parties' agreement
as determined by this title as supplemented by any other
applicable laws.
(13) "Creditor" includes a general creditor, a secured creditor,
a lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a
receiver in equity and an executor or administrator of an
insolvent debtor's or assignor's estate.
(14) "Defendant" includes a person in the position of defendant
in a counterclaim, cross-claim, or third-party claim.
(15) "Delivery," with respect to an electronic document of
title, means voluntary transfer of control, and with respect to
an instrument, a tangible document of title, or chattel paper,
means voluntary transfer of possession.
(16) "Document of title" means a record that in the regular
course of business or financing is treated as adequately
evidencing that the person in possession or control of the record
is entitled to receive, control, hold, and dispose of the record
and the goods the record covers, and purports to be issued by or
addressed to a bailee and to cover goods in the bailee's
possession which are either identified or are fungible portions
of an identified mass. The term includes a bill of lading,
transport document, dock warrant, dock receipt, warehouse
receipt, and order for delivery of goods. An electronic document
of title is evidenced by a record consisting of information
stored in an electronic medium. A tangible document of title is
evidenced by a record consisting of information that is inscribed
on a tangible medium.
(17) "Fault" means a default, breach, or wrongful act or
omission.
(18) "Fungible goods" means:
(A) goods of which any unit, by nature or usage of trade, is the
equivalent of any other like unit; or
(B) goods that by agreement are treated as equivalent.
(19) "Genuine" means free of forgery or counterfeiting.
(20) "Good faith," except as otherwise provided in Chapter 5,
means honesty in fact and the observance of reasonable commercial
standards of fair dealing.
(21) "Holder" means:
(A) the person in possession of a negotiable instrument that is
payable either to bearer or to an identified person that is the
person in possession;
(B) the person in possession of a negotiable tangible document
of title if the goods are deliverable either to bearer or to the
order of the person in possession; or
(C) a person in control of a negotiable electronic document of
title.
(22) "Insolvency proceeding " includes an assignment for the
benefit of creditors or other proceeding intended to liquidate or
rehabilitate the estate of the person involved.
(23) "Insolvent" means:
(A) having generally ceased to pay debts in the ordinary course
of business other than as a result of a bona fide dispute;
(B) being unable to pay debts as they become due; or
(C) being insolvent within the meaning of the federal bankruptcy
law.
(24) "Money" means a medium of exchange currently authorized or
adopted by a domestic or foreign government. The term includes a
monetary unit of account established by an intergovernmental
organization or by agreement between two or more countries.
(25) "Organization" means a person other than an individual.
(26) "Party," as distinguished from "third party," means a
person that has engaged in a transaction or made an agreement
subject to this title.
(27) "Person" means an individual, corporation, business trust,
estate, trust, partnership, limited liability company,
association, joint venture, government, governmental subdivision,
agency, or instrumentality, public corporation, or any other
legal or commercial entity.
(28) "Present value" means the amount as of a date certain of
one or more sums payable in the future, discounted to the date
certain by use of either an interest rate specified by the
parties if that rate is not manifestly unreasonable at the time
the transaction is entered into or, if an interest rate is not so
specified, a commercially reasonable rate that takes into account
the facts and circumstances at the time the transaction is
entered into.
(29) "Purchase" means taking by sale, lease, discount,
negotiation, mortgage, pledge, lien, security interest, issue or
reissue, gift, or any other voluntary transaction creating an
interest in property.
(30) "Purchaser" means a person that takes by purchase.
(31) "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(32) "Remedy" means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(33) "Representative" means a person empowered to act for
another, including an agent, an officer of a corporation or
association, and a trustee, executor, or administrator of an
estate.
(34) "Right" includes remedy.
(35) "Security interest" means an interest in personal property
or fixtures which secures payment or performance of an
obligation. "Security interest" includes any interest of a
consignor and a buyer of accounts, chattel paper, a payment
intangible, or a promissory note in a transaction that is subject
to Chapter 9. "Security interest" does not include the special
property interest of a buyer of goods on identification of those
goods to a contract for sale under Section 2.401, but a buyer may
also acquire a "security interest" by complying with Chapter 9.
Except as otherwise provided in Section 2.505, the right of a
seller or lessor of goods under Chapter 2 or 2A to retain or
acquire possession of the goods is not a "security interest," but
a seller or lessor may also acquire a "security interest" by
complying with Chapter 9. The retention or reservation of title
by a seller of goods notwithstanding shipment or delivery to the
buyer under Section 2.401 is limited in effect to a reservation
of a "security interest." Whether a transaction in the form of a
lease creates a security interest is determined pursuant to
Section 1.203.
(36) "Send" in connection with a writing, record, or notice
means:
(A) to deposit in the mail or deliver for transmission by any
other usual means of communication with postage or cost of
transmission provided for and properly addressed and, in the case
of an instrument, to an address specified thereon or otherwise
agreed, or if there be none to any address reasonable under the
circumstances; or
(B) in any other way cause to be received any record or notice
within the time at which it would have arrived if properly sent.
(37) "Signed" includes using any symbol executed or adopted with
present intention to adopt or accept a writing.
(38) "State" means a State of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of
the United States.
(39) "Surety" includes a guarantor or other secondary obligor.
(40) "Term" means a portion of an agreement that relates to a
particular matter.
(41) "Unauthorized signature" means a signature made without
actual, implied, or apparent authority. The term includes a
forgery.
(42) "Warehouse receipt" means a document of title issued by a
person engaged in the business of storing goods for hire.
(43) "Writing" includes printing, typewriting, or any other
intentional reduction to tangible form. "Written" has a
corresponding meaning.
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1,
1967. Amended by Acts 1973, 63rd Leg., p. 997, ch. 400, Sec. 2,
Jan. 1, 1974; Acts 1983, 68th Leg., p. 1535, ch. 290, Sec. 12,
eff. Aug. 29, 1983; Acts 1983, 68th Leg., p. 2575, ch. 442, Sec.
12, eff. Sept. 1, 1983; Acts 1989, 71st Leg., ch. 846, Sec. 1,
eff. Sept. 1, 1989; Acts 1995, 74th Leg., ch. 921, Sec. 2, eff.
Jan. 1, 1996; Acts 1999, 76th Leg., ch. 414, Sec. 2.12, 2.13,
eff. July 1, 2001; Acts 2003, 78th Leg., ch. 542, Sec. 1, eff.
Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch.
122, Sec. 2, eff. September 1, 2005.
Sec. 1.202. NOTICE; KNOWLEDGE. (a) Subject to Subsection (f),
a person has "notice" of a fact if the person:
(1) has actual knowledge of it;
(2) has received a notice or notification of it; or
(3) from all the facts and circumstances known to the person at
the time in question, has reason to know that it exists.
(b) "Knowledge" means actual knowledge. "Knows" has a
corresponding meaning.
(c) "Discover," "learn," or words of similar import refer to
knowledge rather than to reason to know.
(d) A person "notifies" or "gives" a notice or notification to
another person by taking such steps as may be reasonably required
to inform the other person in ordinary course, whether or not the
other person actually comes to know of it.
(e) Subject to Subsection (f), a person "receives" a notice or
notification when:
(1) it comes to that person's attention; or
(2) it is duly delivered in a form reasonable under the
circumstances at the place of business through which the contract
was made or at another location held out by that person as the
place for receipt of such communications.
(f) Notice, knowledge, or a notice or notification received by
an organization is effective for a particular transaction from
the time it is brought to the attention of the individual
conducting that transaction and, in any event, from the time it
would have been brought to the individual's attention if the
organization had exercised due diligence. An organization
exercises due diligence if it maintains reasonable routines for
communicating significant information to the person conducting
the transaction and there is reasonable compliance with the
routines. Due diligence does not require an individual acting for
the organization to communicate information unless the
communication is part of the individual's regular duties or the
individual has reason to know of the transaction and that the
transaction would be materially affected by the information.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.203. LEASE DISTINGUISHED FROM SECURITY INTEREST. (a)
Whether a transaction in the form of a lease creates a lease or
security interest is determined by the facts of each case.
(b) A transaction in the form of a lease creates a security
interest if the consideration that the lessee is to pay the
lessor for the right to possession and use of the goods is an
obligation for the term of the lease and is not subject to
termination by the lessee, and:
(1) the original term of the lease is equal to or greater than
the remaining economic life of the goods;
(2) the lessee is bound to renew the lease for the remaining
economic life of the goods or is bound to become the owner of the
goods;
(3) the lessee has an option to renew the lease for the
remaining economic life of the goods for no additional
consideration or for nominal additional consideration upon
compliance with the lease agreement; or
(4) the lessee has an option to become the owner of the goods
for no additional consideration or for nominal additional
consideration upon compliance with the lease agreement.
(c) A transaction in the form of a lease does not create a
security interest merely because:
(1) the present value of the consideration the lessee is
obligated to pay the lessor for the right to possession and use
of the goods is substantially equal to or is greater than the
fair market value of the goods at the time the lease is entered
into;
(2) the lessee assumes risk of loss of the goods;
(3) the lessee agrees to pay, with respect to the goods, taxes,
insurance, filing, recording, or registration fees, or service or
maintenance costs;
(4) the lessee has an option to renew the lease or to become the
owner of the goods;
(5) the lessee has an option to renew the lease for a fixed rent
that is equal to or greater than the reasonably predictable fair
market rent for the use of the goods for the term of the renewal
at the time the option is to be performed; or
(6) the lessee has an option to become the owner of the goods
for a fixed price that is equal to or greater than the reasonably
predictable fair market value of the goods at the time the option
is to be performed.
(d) Additional consideration is nominal if it is less than the
lessee's reasonably predictable cost of performing under the
lease agreement if the option is not exercised. Additional
consideration is not nominal if:
(1) when the option to renew the lease is granted to the lessee,
the rent is stated to be the fair market rent for the use of the
goods for the term of the renewal determined at the time the
option is to be performed; or
(2) when the option to become the owner of the goods is granted
to the lessee, the price is stated to be the fair market value of
the goods determined at the time the option is to be performed.
(e) The "remaining economic life of the goods" and "reasonably
predictable" fair market rent, fair market value, or cost of
performing under the lease agreement must be determined with
reference to the facts and circumstances at the time the
transaction is entered into.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.204. VALUE. Except as otherwise provided in Chapters 3,
4, and 5, a person gives value for rights if the person acquires
them:
(1) in return for a binding commitment to extend credit or for
the extension of immediately available credit, whether or not
drawn upon and whether or not a charge-back is provided for in
the event of difficulties in collection;
(2) as security for, or in total or partial satisfaction of, a
preexisting claim;
(3) by accepting delivery under a preexisting contract for
purchase; or
(4) in return for any consideration sufficient to support a
simple contract.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.205. REASONABLE TIME; SEASONABLENESS. (a) Whether a
time for taking an action required by this title is reasonable
depends on the nature, purpose, and circumstances of the action.
(b) An action is taken seasonably if it is taken at or within
the time agreed or, if no time is agreed, at or within a
reasonable time.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.206. PRESUMPTIONS. Whenever this title creates a
"presumption" with respect to a fact, or provides that a fact is
"presumed," the trier of fact must find the existence of the fact
unless and until evidence is introduced that supports a finding
of its nonexistence.
Amended by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
SUBCHAPTER C. TERRITORIAL APPLICABILITY AND GENERAL RULES
Sec. 1.301. TERRITORIAL APPLICATION OF THE TITLE; PARTIES' POWER
TO CHOOSE APPLICABLE LAW. (a) Except as provided hereafter in
this section, when a transaction bears a reasonable relation to
this state and also to another state or nation the parties may
agree that the law either of this state or of such other state or
nation shall govern their rights and duties. Failing such
agreement this title applies to transactions bearing an
appropriate relation to this state.
(b) Where one of the following provisions of this title
specifies the applicable law, that provision governs and a
contrary agreement is effective only to the extent permitted by
the law (including the conflict of laws rules) so specified:
Rights of creditors against sold goods. Section 2.402.
Applicability of the chapter on Leases. Sections 2A.105 and
2A.106.
Applicability of the chapter on Bank Deposits and Collections.
Section 4.102.
Governing law in the chapter on Funds Transfers. Section 4A.507.
Letters of Credit. Section 5.116.
Applicability of the chapter on Investment Securities. Section
8.110.
Law governing perfection, the effect of perfection or
nonperfection, and the priority of security interests and
agricultural liens. Sections 9.301-9.307.
(c) If a transaction that is subject to this title is a
"qualified transaction," as defined in Section 271.001, then
except as provided in Subsection (b) of this section, Chapter 271
governs the effect of an agreement by the parties that the law of
a particular jurisdiction governs an issue relating to the
transaction or that the law of a particular jurisdiction governs
the interpretation or construction of an agreement relating to
the transaction or a provision of the agreement.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
885, Sec. 2.02, eff. April 1, 2009.
Sec. 1.302. VARIATION BY AGREEMENT. (a) Except as otherwise
provided in Subsection (b) or elsewhere in this title, the effect
of provisions of this title may be varied by agreement.
(b) The obligations of good faith, diligence, reasonableness,
and care prescribed by this title may not be disclaimed by
agreement. The parties, by agreement, may determine the standards
by which the performance of those obligations is to be measured
if those standards are not manifestly unreasonable. Whenever this
title requires an action to be taken within a reasonable time, a
time that is not manifestly unreasonable may be fixed by
agreement.
(c) The presence in certain provisions of this title of the
phrase "unless otherwise agreed," or words of similar import,
does not imply that the effect of other provisions may not be
varied by agreement under this section.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.303. COURSE OF PERFORMANCE, COURSE OF DEALING, AND USAGE
OF TRADE. (a) A "course of performance" is a sequence of
conduct between the parties to a particular transaction that
exists if:
(1) the agreement of the parties with respect to the transaction
involves repeated occasions for performance by a party; and
(2) the other party, with knowledge of the nature of the
performance and opportunity for objection to it, accepts the
performance or acquiesces in it without objection.
(b) A course of dealing is a sequence of conduct concerning
previous transactions between the parties to a particular
transaction that is fairly to be regarded as establishing a
common basis of understanding for interpreting their expressions
and other conduct.
(c) A "usage of trade" is any practice or method of dealing
having such regularity of observance in a place, vocation, or
trade as to justify an expectation that it will be observed with
respect to the transaction in question. The existence and scope
of such a usage must be proved as facts. If it is established
that such a usage is embodied in a trade code or similar record,
the interpretation of the record is a question of law.
(d) A course of performance or course of dealing between the
parties or usage of trade in the vocation or trade in which they
are engaged or of which they are or should be aware is relevant
in ascertaining the meaning of the parties' agreement, may give
particular meaning to specific terms of the agreement, and may
supplement or qualify the terms of the agreement. A usage of
trade applicable in the place in which part of the performance
under the agreement is to occur may be so utilized as to that
part of the performance.
(e) Except as otherwise provided in Subsection (f), the express
terms of an agreement and any applicable course of performance,
course of dealing, or usage of trade must be construed whenever
reasonable as consistent with each other. If such a construction
is unreasonable:
(1) express terms prevail over course of performance, course of
dealing, and usage of trade;
(2) course of performance prevails over course of dealing and
usage of trade; and
(3) course of dealing prevails over usage of trade.
(f) Subject to Section 2.209, a course of performance is
relevant to show a waiver or modification of any term
inconsistent with the course of performance.
(g) Evidence of a relevant usage of trade offered by one party
is not admissible unless that party has given the other party
notice that the court finds sufficient to prevent unfair surprise
to the other party.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.304. OBLIGATION OF GOOD FAITH. Every contract or duty
within this title imposes an obligation of good faith in its
performance and enforcement.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.305. REMEDIES TO BE LIBERALLY ADMINISTERED. (a) The
remedies provided by this title must be liberally administered to
the end that the aggrieved party may be put in as good a position
as if the other party had fully performed but neither
consequential or special damages nor penal damages may be had
except as specifically provided in this title or by other rule of
law.
(b) Any right or obligation declared by this title is
enforceable by action unless the provision declaring it specifies
a different and limited effect.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.306. WAIVER OF RENUNCIATION OF CLAIM OR RIGHT AFTER
BREACH. A claim or right arising out of an alleged breach may be
discharged in whole or in part without consideration by agreement
of the aggrieved party in an authenticated record.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.307. PRIMA FACIE EVIDENCE BY THIRD-PARTY DOCUMENTS. A
document in due form purporting to be a bill of lading, policy or
certificate of insurance, official weigher's or inspector's
certificate, consular invoice, or any other document authorized
or required by the contract to be issued by a third party is
prima facie evidence of its own authenticity and genuineness and
of the facts stated in the document by the third party.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.308. PERFORMANCE OR ACCEPTANCE UNDER RESERVATION OF
RIGHTS. (a) A party that with explicit reservation of rights
performs or promises performance or assents to performance in a
manner demanded or offered by the other party does not thereby
prejudice the rights reserved. Such words as "without prejudice,"
"under protest," or the like are sufficient.
(b) Subsection (a) does not apply to an accord and satisfaction.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.309. OPTION TO ACCELERATE AT WILL. A term providing that
one party or that party's successor in interest may accelerate
payment or performance or require collateral or additional
collateral "at will" or when the party "deems itself insecure,"
or words of similar import, means that the party has power to do
so only if that party in good faith believes that the prospect of
payment or performance is impaired. The burden of establishing
lack of good faith is on the party against which the power has
been exercised.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.
Sec. 1.310. SUBORDINATED OBLIGATIONS. An obligation may be
issued as subordinated to performance of another obligation of
the person obligated, or a creditor may subordinate its right to
performance of an obligation by agreement with either the person
obligated or another creditor of the person obligated.
Subordination does not create a security interest as against
either the common debtor or a subordinated creditor.
Added by Acts 2003, 78th Leg., ch. 542, Sec. 1, eff. Sept. 1,
2003.